A CLUSTER ANALYSIS OF IC DESIGN INDUSTRY

Mei-Tai Chu, Rajiv Khosla and Kah-Hin Chai ()
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Mei-Tai Chu: School of Management, La Trobe University, Melbourne, Australia
Rajiv Khosla: School of Management, La Trobe University, Melbourne, Australia
Kah-Hin Chai: Industrial and Systems Engineering Department, National University of Singapore, Singapore

International Journal of Innovation and Technology Management (IJITM), 2014, vol. 11, issue 02, 1-26

Abstract: IC design is upstream and innovation-oriented in semiconductor industry. This industry is emerging rapidly due to severe competition and shorter product life cycle. In this context, maintaining the leading edge among global competitors as well as overcoming operational challenges is critical to pursue sustainability. In order to enhance the achievements and improve service quality, IC design firms often endeavor to comprehend, if the inputs/investments have led to effective outputs/achievements. A holistic discussion on how successful IC design companies prevail can facilitate how different IC design firms utilize their particular attributes associated with organizational goals. The purpose of this research is to conduct a cluster analysis for global top 30 IC design firms through 15 selected variables to understand their characteristics. These 15 variables include inputs/investments and outputs/achievements collected from financial indicators primarily to examine their characteristics in each cluster. The factor analysis, cluster analysis, and discriminant analysis are adopted to identify the attributes of these companies. The findings first show that the preliminary 15 variables can be refined into four significant factors by their factor loadings using factor analysis. Second, five groups among 30 companies have been categorized in terms of cluster analysis. Third, the accuracy is 94.7% by the validation of discrimination analysis. The strengths and weaknesses of each single cluster are also discussed. The results can help IC design companies to pursue a more suitable business model and tackle unique improvements, respectively.

Keywords: Competitive advantage; IC design; factor analysis; cluster analysis; discriminant analysis (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1142/S0219877014500035

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